ARBITRAGE
Arbitrage is the simultaneous purchase and sale of an asset to profit from a difference in the price, exploiting price differences of identical or similar financial instruments on different markets or in different forms.
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Market impact refers to the effect that a trade or series of trades can have on the price of an asset. In trading, large orders or sudden buying/selling activity can lead to significant price movements, especially in less liquid markets. Traders need to account for market impact when executing large trades, as it can result in slippage—where the execution price deviates from the expected price. Effective strategies, such as using limit orders or spreading trades over time, can help minimize market impact.